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Polyus posts 49% decline in net cash flow from operations for H122 as gold production down 15%

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(Kitco News) - Russia’s Polyus, one of the largest gold miners globally, announced today that its total gold output in H1 2022 amounted to 1,068 thousand ounces, down 15% compared to 1,263 thousand ounces produced in H1 2021.

The company said that this decline was driven by lower production of refined gold across all deposits due to lower average grades in ore processed, adding that volumes of ore mined decreased 16% year-on-year to 28,149 thousand tonnes, reflecting lower ore volumes mined across all operating assets except Kuranakh.

Volumes of ore processed amounted to 23,777 thousand tonnes, up 2% on the same period of the previous year driven by higher processing volumes at Olimpiada, Verninskoye and Natalka. Recovery rate decreased to 81.8%, compared to 82.1% in H1 2021.

Polyus added that total gold sales volumes in H1 2022 amounted to 1,015 thousand ounces, down 19% compared to the corresponding period of the previous year, while revenue for the reporting period totalled $1,852 million, down 19% compared to H1 2021.

The group’s total cash costs (TCC) for the first half of 2022 increased 12% year-on-year to $435 per ounce. This reflects lower average grades in ore processed at Olimpiada, Blagodatnoye and Natalka, ongoing inflation in consumables and wage indexation, the company said.

The company’s adjusted EBITDA for the reporting period amounted to $1,215 million, a 26% decrease compared to $1,638 million in the first half of 2021, as result of lower gold sales volumes and higher TCC on a per ounce basis.

Polyus also reported that its H1 2022 profit amounted to $1,387 million, up 27% compared to H1 2021 ($1,093 million), and adjusted net profit for the period amounted to $792 million, down 25% compared to H1 2021 ($1,051 million). The company’s net cash flow from operations was $701 million, which is a decline of 49% over H1 2021 ($1,379 million).

The company noted that its net debt (incl. derivatives)/adjusted EBITDA ratio increased to 0.8x in the first half of 2022, compared to 0.6x in the second half of 2021, reflecting a higher net debt position and decline in adjusted EBITDA over the last twelve months.

Polyus is the largest gold producer in Russia and a top 5 gold producer globally with one of the lowest cost profiles. The company also holds the world’s largest gold reserves with 104 million ounces of proven and probable gold reserves.

The company’s principal operations are located in Krasnoyarsk Territory, Irkutsk Region, Magadan Region and the Republic of Sakha (Yakutia) and include 5 operating mines, alluvial operations and several advanced development projects.


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